MR. MCCURRY: Good afternoon, everybody. Nice to see
you again today. Before I start the briefing that Dr. Rivlin has
graciously agreed to give let me just -- a couple of updates.

As you know, earlier today the President instructed Leon
Panetta, in response to the letter the President received last night
from Speaker Gingrich and Majority Leader Dole, to go to Capitol Hill
to meet with the bipartisan leadership of Congress to talk further
about ways in which we could avert what is now the likely shutdown of
the federal government. The Republican leadership of Congress
refused to set up that meeting. We then made an effort to arrange a
bipartisan meeting with the leadership of the House and Senate Budget
Committees. Again, unfortunately, the Republican leadership have
rejected that meeting. So there will be no meeting between the Chief
of Staff and the bipartisan leadership on the Hill today, for those
of you who are looking for further things to cover today.

The President is disappointed in this. The solution to
the crisis that we're in now must be bipartisan. The President
thought it would be very appropriate to have bipartisan meetings on
the Hill today between his Chief of Staff and Republican and
Democratic leaders to see how we can move ahead at this point. That
was not -- apparently, not acceptable to the Republican leadership of
Congress.

Q Mike, Dole said he'd cancel his schedule to be
here for this. Do you know why then he's not willing to meet with
Mr. Panetta?

MR. MCCURRY: I don't know. You'll have to direct that
to them.

Q What did they tell you why --

MR. MCCURRY: The President had instructed the Chief of
Staff to determine if there was any movement on the part of the
Republican leadership to see if we could move ahead on this
situation. But apparently, there's no willingness to have the type
of bipartisan meeting that's necessary if we're going to find a
bipartisan solution to this crisis.

Q Is it they didn't want the Democrats there?

MR. MCCURRY: Apparently.

Q Mike, why wouldn't the President get personally
involved in this?

MR. MCCURRY: Well, the President, as you know, was
personally involved by meeting with both Speaker Gingrich and
Majority Leader Dole last week and made it very clear what needs to
happen if we're going to have serious discussions about the budget.
But there just doesn't seem to be a point now where we can have that
type of discussion.

Q Were the Republicans willing to meet with Mr.
Panetta if he met only with Republicans and left the Democrats out of
the meeting?

MR. MCCURRY: That apparently was their preference. But
our view of this and I think what is obvious at this point is that if
there's going to be a solution to the problem we're in now, it's
going to have to be bipartisan.

Let me move on now to introduce Dr. Rivlin --

Q Can you take just one question of why you would
cancel the Monday trip to Boston? Is it budget-related?

MR. MCCURRY: The President had intended to go Monday to
Boston for a health care discussion and also for a political
fundraiser. In light of the very clear likelihood that we will be in
the process of shutting down the federal government Tuesday, and the
President believed it was appropriate for him to be here. He will be
able to participate in the health care discussion by telephone and
he's asked the First Lady to represent him at the political event.
which she has graciously agreed to do.

Q How about the trip to Japan?

MR. MCCURRY: There's no change in our plans at this
point. But, obviously, we'll have to watch how the situation
develops next week.

Q Is today the day the President vetoes the debt
limit bill?

MR. MCCURRY: The debt limit measure has not been sent
to the White House, and our understanding is it likely will not come
today --

Q Will it come tomorrow?

MR. MCCURRY: -- so there's nothing here to veto. You
have to ask the Republican leaders of Congress that question.

Okay, let me get on because we have a short amount of
time here between the President's events.

Dr. Rivlin, the Director of the Office of Management and
Budget, has agreed to go through with you the very detailed plans
that have been submitted to OMB by the various Cabinet agencies that
describe how they will deal with the contingencies we'll be dealing
with on Tuesday. It's a delight to have her here.

Alice.

DR. RIVLIN: Thank you very much, Mike.

It seems increasingly likely that the Congress is
determined to force a shutdown of the federal government, beginning
with the federal government runs out of money at midnight on Monday.
I'm here to talk about our plans for shutting down the government in
an orderly way, if we have to do that, starting Tuesday morning if
that becomes necessary. I want to talk about what shutdown means for
people who are expecting services from their government and what it
means for people who work for the federal government.

But first, a word about why this is happening. It seems
sort of stupid to be talking about closing down the federal
government, closing down services that people really need and expect
from their government. It is stupid. It is unnecessary. We wish we
were not even talking about this. Congress is precipitating this
crisis because they have not done their work. They have not done the
work assigned to them by the Constitution of passing appropriations
legislation to keep the government funded.

When the government's fiscal year started on the 1st of
October, only two appropriations bills out of 13 had been passed. At
that time, the Congress, realizing they hadn't gotten their job done,
worked with the administration to pass a stop-gap funding measure, a
so-called continuing resolution, to fund the government through the
13th of November while they did their job.

Now it is almost the 13th of November, but they have
made very little progress. Only three more bills have been passed
and have not actually even, all of them, gotten here. But instead of
doing what would be the sensible thing of extending the continuing
resolution in a businesslike way until they get their job done, they
have decided to precipitate a crisis. They have been working on a
continuing resolution that will not even be voted until late on
Monday, and they already know that is unacceptable to the President
because it is not just a simple continuation of funding. It has
Medicare premium increase on it, which is a totally inappropriate
thing. And it has very strict restrictions on the operations of
government agencies.

Now, we hope that this crisis will be resolved, but if
it is not, we have to close down the government. And I just want to
tell you what happens. The money runs out for agencies that do not
have an appropriation, which is almost all of them, on -- at midnight
on Monday. Federal workers should report to work on Tuesday morning.
Some of them will continue to do their jobs either because their
activities have already been funded, or because what they do involves
services which are necessary to protect life and property from
imminent threat.

Those that don't fall in that category, and there will
be about 800,000 of them nationally, will shut down their activities
in an orderly way and go home. They will be furloughed until the
crisis has been resolved, appropriations bills have been passed and
signed by the President and the government is back on track. That
might be a few hours, it might be a few days, it might be longer.
That entirely depends on the Congress.

So what happens? Well, let me say first who is -- what
is not affected. The Agriculture Department is not affected because
Congress actually passed an appropriations bill for Agriculture.
Social Security checks and payments for Medicare, Part B,
the hospital part, will go out because those are permanently
appropriated. However, there will be no way to process new
applications. Medicaid supplementary security income and welfare
checks, aid to families with dependent children, those will continue
at least through the months of November and December because the
first quarter of this fiscal year for those programs has been funded.
It's forward funded.

Emergency-type activities, those necessary to protect
from imminent threats to life and property, will continue. Those are
law enforcement, the FBI, and the ATF will continue at their posts.
Prisons, prison guards will continue. Border control and the
customs. Air traffic control will continue. National security will
not be affected because the uniform military and some others
necessary to protect national security will continue. Health
services will continue. The veterans hospitals will remain open and
the Indian health services.

Other activities basically will close down. What does
that mean for average citizens? Well, it depends who you are. There
isn't any average citizen. If you're a businessman who is planning a
trip and doesn't have a passport, you won't be able to get one. The
trip will just have to be delayed. If you're a family planning to
visit a national park or the Smithsonian Museum, you will find that
the doors are closed. If you have your 65th birthday and you were
planning to apply for your Social Security or your Medicare, or if,
for some other reason you were applying for veterans benefits, those
applications will not be processed.

If you're a government contractor, you will not be paid.
You can go on doing some work, I guess, but you won't be paid for it.
If you are a school superintendent and your activities were funded by
a federal grant, that grant will not be forthcoming. Neither will
other kinds of grants for research and the wide variety of activities
that the federal government funds. If you're a young person who
decided you want to join the military, you won't be able to do that;
the military recruitment operations will be closed down.

If you're an ordinary citizen or a worker, you should
worry that the inspections that the government carries out of
workplace safety, or of air and water cleanliness, or of toxic
substances will not continue. The kinds of things that are imminent
threats to health, like meat inspection, would continue, but not
other kinds of environmental inspections.

If you're a federal employee, you fall into one of two
categories -- those who must come to work for the reasons that I have
talked about and those that will be furloughed. But in neither case
will you be paid on time. The Congress would have an obligation to
pay those who have been carrying out the services necessary to
protect life and property, and would do so retrospectively. They do
not have an obligation to pay those who are furloughed, but they
might do so. But, in any case, nobody gets paid for the period of
this shutdown. And if it lasts a long time, that could have a
considerable impact on the economy around the country. That's a lot
of people not getting paychecks who normally go to the corner grocery
store. In this area of Washington, D.C., it would be quite a large
number.

So if this shutdown were to continue for a while, it
could have major effects, and those would get more serious as they go
along. About 800,000 employees would be furloughed, and all of them,
as I said, would not be paid.

Let me repeat -- the President does not want to shut
down the government; none of us do. But if the Congress forces this
crisis, we will do just that, and we have orderly plans to do so.
Each agency has a plan. We reviewed those plans in September because
we thought this might happen on the 1st of October. It is basically
up to each agency to interpret the law, but OMB went through these
voluminous plans which were very carefully done and made sure that we
understood them, that the agencies understood what they were to do,
and the plans were reasonably consistent.

So we're ready for this crisis. It's a little bit like
being ready for a snow or a hurricane. We know what we have to do,
and the agencies will go ahead and do it. Those plans, incidentally,
are at OMB if you would like to look at them. They're quite large.

I'd be happy to answer any questions. I also have John
Koskinen in, our Deputy for Management here, to help me.

Q If you're a veteran how are you likely to be
affected by a government shutdown?

DR. RIVLIN: Well, it depends what your needs from the
Veterans Administration are. If you're seeking medical care you will
get it. And the veterans hospitals will be open. If you have a
regular compensation check it will come. There may be difficulties
with some of the benefits, with processing new applications, and also
with the benefits like the G.I. Bill payments because those have to
be certified that the student is actually in school and there may be
difficulties of getting that certification, so they are likely to be
delayed.

Q What about disability checks --

DR. RIVLIN: Disability checks, as I understand it, will
go ahead.

Q Dr. Rivlin, you said the President doesn't want
this. Then why not just sign the CR? What's the long-term harm of
signing that? Even though it's got some things he doesn't want they
would only last a few weeks --

DR. RIVLIN: No, that's not true. The principal reason
for not signing it is that it has an increase in the Medicare premium
-- the Republicans couldn't wait to get into a budget negotiation and
do the Medicare discussion in an orderly way. They attacked a large
increase in the Medicare premium to this CR. The President cannot
sign that.

Q To make sure I understand, are you saying if he
signs the CR, then that Medicare premium increase would be permanent
even after the budget --

DR. RIVLIN: Absolutely. That's what they're trying to
force the President to do. And he will not be forced to do that.

Q Ms. Rivlin, members of Congress get paid, and what
about the President's salary?

DR. RIVLIN: Members of Congress and the President will
be paid.

Q Is it fair for them to be paid while other
employees --

DR. RIVLIN: It's what the law says, and it's not a
question of fairness. The President has to carry out his
constitutional duties. But in any case, that's what the law says.

Q Dr. Rivlin, given the potentially dire consequences
that you just outlined, isn't it a little silly for negotiations to
break down over who is not in the room and who's in the room and the
shape of the table? I mean, you almost got together today and it
just seems a little silly.

DR. RIVLIN: Well, there has to be a bipartisan solution
to this problem. It is not clear to us that the Republican
leadership wants solutions because they keep imposing requirements
that we cannot meet. This has to be settled in a sensible, orderly,
bipartisan way, and to say only Republicans can be in the room is
simply not acceptable to us.

Q Given the most vital services will continue, do you
think the vast majority of American people will even notice?

DR. RIVLIN: I think it depends on how long it goes on.
More and more people would notice as it went on. They would notice
in a lot of different ways. They would notice because they were
personally affected or because their community was affected. If
federal employees are not being paid in an area where there are a lot
of them -- say, around a military base or a federal installation --
the grocery stores and the cleaners and the regular establishments
are going to feel that problem.

Q For military bases around the country, civilian
personnel, will many of them be working? And, also, defense
contractors and contractors like that, if they only miss a day or
two, we're just talking about a delay in payment, correct, not any
disruption than a couple of days' pay?

DR. RIVLIN: That's right. As I said, it depends how
long it goes on. But contractors may not want to continue working
for a long time if they are not being paid.

As to civilians around military bases, that depends on
what they are doing. In general, unless their services are
absolutely necessary to protect life and property or the national
security, they will not be working.

Q How many federal workers would keep working in a
shutdown?

DR. RIVLIN: Let me make clear, there are about 1.9
million, almost 2 million federal civilian workers, not counting the
military. We estimate now that about 800,000 of them would be
furloughed. The others would keep working either because they're so
necessary or because they're already funded. So that's about 1.1
million who would continue to be working, but without pay.

Now, other people might want to work and continue to get
their jobs done, because federal workers are very dedicated. They
are not allowed to do that. The law says that unless they are
covered by these categories, they cannot volunteer, so they would
have to stay home.

Q Dr. Rivlin, will people in uniform receive their
paychecks on time?

DR. RIVLIN: No.

Q Nobody will get their paychecks?

DR. RIVLIN: Nobody gets their paychecks.

Q Why hasn't the President signed the energy and
water appropriations bill? Hasn't that been sent along?

DR. RIVLIN: It has been sent along, and that --

Q He could sign that and prevent some dislocation
there, right?

DR. RIVLIN: That is a possibility, but it did not seem
like the right thing to sign under duress.

Q Is there a problem with that bill? Does he have an
objection to it?

DR. RIVLIN: No, the President has said he would sign
that bill.

Q How many federal workers are there in the
Washington metropolitan area, and how many of those will be
furloughed?

DR. RIVLIN: There are about
three-hundred-and-some-odd-thousand in the metropolitan area.

Is that right, John?

MR. KOSKINEN: There are about 304,000 employees in the
area, and the estimate is that about 150,000 of those would be
furloughed.

DR. RIVLIN: So that's a large impact. The federal
government is the largest employer, largest single employer in this
area, and it's a very large impact, especially since none of them
would get paid.

Q And members of Congress get their checks on time?

DR. RIVLIN: So far as I know, they would. I don't know
how that works.

Q So they're the only ones who would get their checks
on time?

MR. KOSKINEN: There is some question about that. They
clearly are in the category -- all political appointees who are
confirmed by the Senate because they have no definition of leave time
will, in fact, be in the excepted category. But it has -- because we
haven't ever missed a pay period, it has not been determined in the
past whether the Congress would be paid. Clearly, we will incur an
obligation to pay the Congress and excepted employees, but to the
extent that you cannot write a check without an appropriation, to the
extent there is not an appropriation, then I think the check would
probably not be good.

Q What is the case?

MR. KOSKINEN: At this point, we have not signed the
Legislative Branch appropriation bill, so they would be operating
--if there is no continuing resolution, they would be operating, in
effect, under the Constitution as excepted for that reason, but there
would not be an appropriation to pay them.

Q So they wouldn't get their checks on time? Members
of Congress will not get their checks on time?

DR. RIVLIN: We can't answer that question right now
because we haven't --

MR. KOSKINEN: The only issue is we have not looked at
the statutory -- some statutory provisions provide, as the Director
noted, for forward funding or permanent appropriations. And it is
possible the legislation appropriation bill covers all of the
activities of support staffs and others. And we have not actually
looked to see what the statute says about forward funding for members
of Congress themselves.

Q I'm sorry, I'm not really clear. If there is no
existing funding, how do you pay them?

DR. RIVLIN: Let me try to straighten this out. I think
the answer to the question, would the checks be paid on time for
those who are clearly excepted in this small category is one to which
we don't know the answer; I'm sorry. And the legislative
appropriation, however, is like all other appropriations; the
Congress would determine, in the absence of funding for the Congress,
which of their staffs were necessary under the statute.
They would make --

Q Could all of them be necessary?

DR. RIVLIN: That is a matter to ask the Congress. They
interpret that statute for themselves.

Q Well, what about for the President then?

DR. RIVLIN: The President --

Q Is the President necessary?

Q No, but would he get paid, or would he --

DR. RIVLIN: The President will get paid, yes.

Q On time?

DR. RIVLIN: I don't know. I just said I don't know the
answer to that. It's a very clear "don't know." No ifs, ands, or
buts about it. I don't know.

Q There have been suggestions that --

Q What you are saying here is that the President, the
Congress, and all political appointees that have been confirmed by
Congress are all eligible under the law to have their pay continue,
but that you do not know because of the status of various
appropriations whether those checks will get to them on time?

DR. RIVLIN: I thought -- yes, that is exactly right,
and I think we've been very clear on that.

Q There have been suggestions from some that the
designation of, in essence, more than half the federal workers as
essential for safety and health is an excessive designation and that
it's perhaps too broad.

DR. RIVLIN: Well, remember that not all of the 1.1
million come under that category. A significant number of them are
working because they have -- their activities have already been
funded. The whole Department of Agriculture, for instance. But
people who are necessary to send out the Social Security checks, they
are funded -- and the Medicare checks. So we're not saying that half
the government is essential to the protection of life and property;
we are saying that either they are that, or they come under an
appropriation which has already happened for one of a number of
reasons.

Q Talk about the ledger sheet, please. What is saved
with a furlough day and what does it cost?

DR. RIVLIN: Well, we don't know that exactly and it
depends a lot on how long it goes on. We have not made a cost
calculation. The last time that the government was shut down was in
1990, over a weekend. The GAO made a calculation of what that cost
and that's been quoted around -- I don't think it's terribly
relevant, but do you remember what it was?

MR. KOSKINEN: We can make an estimate and we won't know
until it's done, but on the basis of the weekly payroll, if we have
800,000 employees who are furloughed and not -- for whom we're not
incurring an obligation to pay them, that will amount to about $1
billion a week. And so the issue will be once the shutdown is over,
the Congress will have to make a decision -- in the past it has
always moved in that direction -- to reimburse those employees.

DR. RIVLIN: But the question of cost relates to things
that really have to be -- the fires banked and the computers shut
down and is there an additional cost to starting up again. Yes,
there is. It's certainly more expensive to close something down and
start it up again. We don't have an exact estimate of what that is.

Q If I'm a federal employee and this drags on for a
week or two, and I decide I don't want to go to work because there's
a prospect of -- no prospect of getting paid, do I get reprimanded
when this is all over?

DR. RIVLIN: I would assume so, yes. That would be up
to the supervisor and the head of the agency. I think federal
employees are a pretty dedicated lot and I think it would have to go
on quite a long time before that question even became relevant. The
more relevant question is we're going to have a lot of employees who
want to come to work and we're going to have to say, sorry, we can't
let you because you don't fall in one of the categories.

Q On that, why is it necessary for them to report to
work Tuesday morning?

DR. RIVLIN: It is necessary for them to report to work
Tuesday morning, even if they are about to be furloughed, to make
sure that they have closed down their activities. Our instructions
to the agencies say everybody reports to work Tuesday morning, and
then we will close down the activities as quickly as possible.

Now, in most cases, we would assume that that would be
about three hours, but it depends on how difficult it is to close
down whatever it is that you're doing. If it just involves cleaning
off our desk and putting the pencils in the drawer, it won't take
very long.

Q What about the District of Columbia? They don't
have an approps bill yet.

DR. RIVLIN: They do not. And the District of Columbia
has a shutdown plan. That plan is not reviewed by the Office of
Management and Budget, although, of course, we've talked to them
about it, and it is reviewed directly by the Congress. But they have
a plan, and you should consult the City Administrator, Michael
Rogers, about that. My understanding is that they will close quite a
lot of offices, that they will not pick up trash, that they will not
process licenses, but they will keep health facilities, law
enforcement and the schools open.

Q How concerned are you that the public might decided
that the White House and the Congress are both to blame for this
mess, in other words, that you could both lose because of this game?

DR. RIVLIN: Well, I think that the public doesn't have
a very clear understanding of what's going on. That's why I think
we're trying to clarify it. But what I feel very strongly about, and
so does the President, is we do not want to close down the
government, we do want to have an orderly budget process, but the
Congress is precipitating this and they haven't done their job, and
unfortunately, we are required in a businesslike way to close down
the government because the appropriations have not been made.

Q Can you answer the question about what's the status
of the White House staff? Will some of them be furloughed?

DR. RIVLIN: Yes, they will. The White House staff and
the Office of Management and Budget has a plan like everybody else.
I don't know the exact details of the White House staff, but not
everybody will be coming to work.